Crocuer Enterprises v Giordano Poultry
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mann |
| Judgment Date | 28 June 2013 |
| Neutral Citation | [2013] EWHC 2491 (Ch) |
| Court | Chancery Division |
| Date | 28 June 2013 |
| Docket Number | Case No: HC10C02092 |
[2013] EWHC 2491 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
The Rolls Building
Fetter Lane
London EC4A 1NL
The Honourable Mr Justice Mann
Case No: HC10C02092
MS M HEAL appeared on behalf of the Claimant
MS JACQUELINE REID appeared on behalf of the Defendant
Approved Judgment
Digital Transcript of Wordwave International, a Merrill Communications Company 101 Finsbury Pavement London EC2A 1ER Tel: 020 7422 6131 Fax: 020 7422 6134 Web: Email: (Official Shorthand Writers to the Court)
This is a Case Management Conference in a case which is a patent action, but which also contains claims to design right. The claimants are the owners of a patent for a bird feeding mechanism. The patented device is said to be a device which enables birds such as poultry to be fed clean water in a way which enables them to be properly seen by the keeper and which is more beneficial than other competing products. I do not need to say more about it than that.
The claimants claim that the product imported by the first defendant is an infringing product. There are other defendants who are companies or individuals concerned with the first defendant, but I do not need to deal with the identity of those defendants for the purposes of this judgment. Nor do I need to deal with the identity of the second claimant.
Infringement is disputed and the patent is challenged by the defendants on the usual grounds of obviousness and so on.
The design right is challenged both in terms of infringement — it is not admitted there is copying — and in terms of the subsistence of design right as well. Amongst the defences run are method of construction and a form of "must match", and other defences.
Having received the claim, the defendants made their own claim. They have their own infringement action based on their own patent and they make their own design right claim, although in their case the design right is limited to a small area of the device in question through which water can be drained for the purposes of cleaning out the device.
The action was started by a claim form issued on 23 June 2010. Since then, the action has not got very far. There was an exchange of pleadings and by the beginning of 2011 the matter had got as far as the claimants wishing to amend their Particulars of Claim to include a revocation claim in respect of the defendant's patent. They had resisted the defendants' patent in their own Reply, but in order to be able to claim revocation and ancillary relief they obviously felt that they needed to include that in a claim rather than in a Reply and they sought permission to amend accordingly.
Permission to amend was conceded in principle, but there was then a dispute about costs. The defendants said that the claimants should be subject to a normal costs order which is paying the costs of and occasioned or thrown away by the amendment, and the claimants resisted that. That point, which was a small one which ought to have been easily resolved, was going to be one for me to decide this morning on this CMC, but it has now gone away.
So far as relevant the order that will be made, and subject to the next point which I have to deal with, which is a transfer to the County Court, will be that the costs of and occasioned by the amendment are to be costs in the case, and the case for this purpose is to be the claim in relation to the defendant's patent. That point is therefore out of the way.
There is a dispute as to the directions which should be made in this action, but before dealing with those I have to deal with an application by the defendants to transfer the claim to the Patents County Court.
Nothing has happened in this case since the beginning of 2011 until very recently. The next relevant thing which seems to have happened in this case is that at the end of March 2013 and just before the change of regime in relation to Conditional Fee Agreements ("CFAs"), which came into force on 1 April 2013, the claimants entered into a CFA with their solicitors. Having done so, however, they did not then give notice to the other side until after the regime had changed, about 4 April. The effect according to Ms Reid, who appears for the defendants, is that the claimants got the benefit of a pre-regime change CFA and the defendants had not been given the opportunity to counter that with their own new arrangements because they were notified of it too late.
As will appear, the existence of the CFA is a major factor in the application to transfer. In about mid May it appears that the claimants applied for this directions hearing. There is a dispute as to whether or not the defendants ever received formal notice of that. They claim to have received notice of it only when a listing appointment was arranged by the Listing Office. At that point they managed to get hold of a copy of the application through counsel's clerk. I do not propose to deal with that. All I will say is that if they were not served with a notice of an application for directions that is deeply unsatisfactory.
However, the defendants are not necessarily whiter than white when it comes to delays because very shortly before this hearing took place they notified the claimants that they, the defendants, were going to seek a transfer of this case to the Patents County Court, but they did so at a time when those concerned with the management of the claimants were on holiday and so the claimants were not able to obtain clear instructions for certain evidential matters which, according to Ms Heal who appears for the claimants, they might have wished to provide. Be that as it may, the claimants did not resist the idea that I should deal with the transfer application and that is the matter which was argued before me this morning.
Putting the matter shortly, the defendants say there should be a transfer of this claim for, in outline, the following reasons. They say that the financial value of the claims in this case are small. The defendant's own figures show small sales and profits of their product and they say that the profits apparent from their own sales are so small that they demonstrate that the claimants' damages claim must be worth relatively little and certainly would be well below the current Patents County Court damages of £500,000. The sales for the last eight or nine years are summarised, and, by way of example. I can state that in 2012 1,208 units were sold, each at a price of £17.50, yielding profits for the defendants of only £3.00 per unit. In the previous year 1900 units were sold, but the preceding years were substantially less than either of those two years. Accordingly, the claimants' damages claim is said to be small.
The defendants also point out that so far as design right is concerned, the claimants' design right has already expired and so there can be no question of an injunction based on design right.
The claimants' comparable figures are not known because the claimants have not disclosed them, but I am invited to assume that they are unlikely to be as high as £500,000. Ms Reid points out that the claimants have not said otherwise, but I have already pointed out that that is somewhat unfair bearing in mind that the claimants have not had a real opportunity to put in evidence on the matter.
Next (I am going through certain prescribed criteria) Ms Reid points out that neither side will suffer any form of geographical disadvantage in the matter being tried in the Patents County Court. Whether it is here or there, the matter will be tried in this building; that is to say the Rolls Building.
Ms Reid then turns to the nature of the dispute itself. She said it is not legally complex. The patent is relatively simple to understand and is not technically complex. The same is true of her own patent. The alleged infringing products are not technologically complex and I would interject that having seen both of them in court this morning that has to be accepted as being true. Nor are the legal issues surrounding the claim complex. Each of the parties is running what one might call the usual defences to the other's patents and each supports its defences by three readily understood pieces of prior part. The design right claim itself is not particularly difficult to grasp.
Next, Ms Reid points out, and again in my view correctly, that this case is not one that has any great significance to members of the public. So far as trial length is concerned, the length is agreed to be around two days. That is well within the sort of trial length that takes place in the Patents County Court. All those factors, Ms Reid says, point to a transfer. However, she also relies on what she describes as a lack of equal footing as between the defendants and the claimants for the purposes of the new definition of the overriding objective in the form of a distortion that is now introduced by the recently entered into CFA. As things stand, the claimants have the benefit of a CFA with the prospect, if the claim is successful, of being able to recover the uplift from the defendants unless the court for some reason disallows it. There does not seem to have been any ATE insurance in this case, but nevertheless the uplift is likely to be significant. There is said to be a distortion because the defendants do not have their own CFA in place and the timing of notification of the claimants' CFA means that they did not have the opportunity to consider putting one in place in the knowledge that the claimants had one. This CFA point is a significant point to which I will have to return later.
Ms Heal counters that case by not challenging what the defendants say about their own profits, at least for the purposes of today, but pointing out,...
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